When must a developer provide Affordable Housing?

The question on many smaller scale developer’s lips for some time has been “how many units can I build without paying for/providing affordable housing?” After a period of uncertainty, we now have a very clear message following a recent court decision.

Written Ministerial Statement

Back on 28 November 2014, the Minister of State for Housing and Planning made a Written Ministerial Statement regarding affordable housing contributions, which included the following:

Developments of ten units or less, which had a combined gross floor space of no more than 1,000 square metres, would be excluded from affordable housing levies and tariff based contributions.

In designated rural areas, including National Parks and Areas of Outstanding Natural Beauty a lower threshold could apply. Developments of five units or less could be excluded from affordable housing levies and tariff based contributions. Development of between six and ten units could be subject to a commuted sum payable on or after completion.

On that same day the Written Ministerial Statement was made, the National Planning Practice Guidance (NPPG) was amended to reflect the new policy.

Court Case

This new policy and change to NPPG was challenged by two local councils in judicial review proceedings.

The councils were successful in the High Court, but on 11 May 2016 the Court of Appeal allowed an appeal and reversed the High Court’s decision.

Future Implications?

More small sites are likely to be developed as the affordable housing burden will be lifted. Many developers have previously been deterred from seeking planning on such sites due to the costs surrounding affordable housing or the lack of profit if the number of units was to be reduced to avoid the affordable housing threshold.

Conversely, councils will be detrimentally affected by less affordable housing units being provided and/or loss of “section 106” contributions from these smaller residential developments.

Secretary of State for Communities and Local Government v West Berkshire District Council and another [2016] EWCA Civ 441

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